Federal highway money keeps flowing

Last-minute fix helps Oregon, other states.

Oregon and other states narrowly averted a crash last week when both houses of Congress came up with a temporary fix to keep the federal highway fund solvent  and the cash flow continuing for construction projects.

But the fix will last only 10 months, until the end of May.

Its like putting a patch on a flat tire, says Travis Brouwer, assistant director of the Oregon Department of Transportation. You know its going to blow out again soon. This is not a long-term solution.

The most recent long-term federal authorization for transportation spending ended back in 2009. After a series of short-term extensions, Congress in July 2012 agreed on a extension due to end Sept. 30.

As federal affairs adviser for ODOT until recently, Brouwer kept track of the political maneuvering that finally resulted in a short-term agreement to keep the fund solvent. The fund was within days of running out of money.

Oregon had considered floating a loan of up to $110 million to the federal government to meet its share of obligations to highway projects already underway this summer.

We were prepared that they would not reimburse us in full and on time, so we would pay our contractors and then send a bill to the federal government, which would give us an IOU, Brouwer says.

Oregon had saved some money that would have allowed the state to maintain a cash flow to contractors for a few months.

While the good news is that Oregon will not have to float a loan, the bad news is that Oregon can expect only about two-thirds of the federal aid it would get for the next federal budget year, which ends Sept. 30.

We wont be putting as much work out to bid for next summer as we could if they had provided all the money up front, Brouwer says.

That could change if congressional negotiators reach a longer-term agreement by the end of May.

As for projects scheduled to start construction in summer 2016, Brouwer says they will hinge on what Congress does with the fund. If they do not come up with the funding, then we wont put them out to bid.

Brouwer says the continued uncertainty about federal funding makes it hard for Oregon and other states to plan projects and put out bids.

Some members of Congress want to end almost all federal funding for transportation projects. While President Barack Obama and congressional leaders oppose that stance, they have been unable to agree on how to keep the highway fund solvent, let alone increase it to allow for more projects.

The federal gasoline tax is 18.4 cents, where it has been since 1993. Because cars have become more fuel-efficient, gasoline-tax collections have not kept pace with inflation in construction costs.

We cannot determine how many projects we will build six years from now when we dont know how much money we are going to have six months from now, Brouwer says.